PA3.SI WACC - Weighted Average Cost of Capital

The WACC of TA Corporation Ltd (PA3.SI) is 6.1%.

The Cost of Equity of TA Corporation Ltd (PA3.SI) is 13.75%.

The Cost of Debt of TA Corporation Ltd (PA3.SI) is 4.35%.

	Range	Selected
Cost of equity	11.40% - 16.10%	13.75%
Tax rate	9.50% - 12.60%	11.05%
Cost of debt	4.20% - 4.50%	4.35%
WACC	5.5% - 6.7%	6.1%

WACC

PA3.SI WACC calculation

Category	Low	High

Long-term bond rate	2.7%	3.2%
Equity market risk premium	5.1%	6.1%
Adjusted beta	1.7	2.03

Additional risk adjustments	0.0%	0.5%
Cost of equity	11.40%	16.10%

Tax rate	9.50%	12.60%
Debt/Equity ratio	3.37	3.37
Cost of debt	4.20%	4.50%

After-tax WACC	5.5%	6.7%


Selected WACC	6.1%

PA3.SI's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for PA3.SI:

cost_of_equity (13.75%) = risk_free_rate (2.95%) + equity_risk_premium (5.60%) * adjusted_beta (1.7) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.